Punchline: At a time the the country is bursting at the economic seams with high debt and unfunded liabilities, the push is on to up spending by another trillion dollars … and up taxes to cover it. Bad idea. This excerpt cuts to the chase.
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Excerpted from Forbes: Uncommon Sense – Wrong Bill At The Wrong Time, 03.10.10
Even before President Obama rammed through his trillion-dollar-plus stimulus/bailout packages last year, there was a growing sentiment that the country’s top priority ought to be tackling the entitlement programs whose liabilities are like a swelling aneurysm in the brain of the body politic waiting to rupture.
- The combined unfunded liabilities of Medicare and Social Security–the federal health care and the pension programs for the elderly — are $107 trillion, seven times the current GDP.
- Medicaid, the joint federal-state health insurance program, is consuming on average 21% of state budgets, their single biggest ticket item even before ObamaCare dumps another 16 million people into the program, expanding the Medicaid population by 25%.
- State and local government owe their employees a trillion dollars in pension and other benefits than they have funds to deliver.
There are not enough taxpayers in the country or creditors in China capable of financing all these promises.
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Expanding this massive, multifarious entitlement state even more strikes most normal people as sheer lunacy — especially now that it is visibly coming apart at the seams.
- General Motors and Chrysler–the corporate version of the public welfare state in which unions had negotiated the best wage and pension deals in the free world — have already been forced into a taxpayer-financed bankruptcy.
- California, America’s most European state, is technically bankrupt, thanks to the ubiquitous influence on the state budget of its public unions and its entitlement spending.
- The deficits and debt of the so-called European PIGS (Portugal, Italy, Greece and Spain) — the social democracies whose cradle-to-grave welfare policies are the inspiration behind Obama’s programs –are on the brink of bankruptcy. Greece, the most vulnerable of the lot, has a deficit of 12.7% of the GDP–not that much higher than America’s 10.6 %.
ObamaCare could well become President Obama’s Iraq.
It will exacerbate the crisis of the entitlement state, requiring someone else to step forward and clean up the fiscal mess he is creating.
The Homa Files 